Dell’s VxRail Partners Expect Price Increase As Broadcom Kills VMware Perpetual Licenses

Dell’s VxRail Partners Expect Price Increase As Broadcom Kills VMware Perpetual Licenses



“It’s created a demand spike for the product. Customers on VMware environments mostly prefer to lock in their perpetual licensing for three more years before any price increases kick in,” one VxRail seller tells CRN.

The death of VMware’s perpetual licenses has come calling for Dell Technologies’ VxRail, with customers racing to lock in prices before perpetual license sales end April 30, multiple partners told CRN.

Partners fear VMware’s new parent Broadcom could hike the cost of the market-dominating hyperconverged infrastructure solution as much as 30 percent once the deadline passes in two weeks.

“The price of VMware licensing will be going up,” said one Platinum partner who asked not to be identified. “We’re trying to help customers take advantage by leveraging creative financing options to get their VxRail deals with perpetual licensing booked before the deadline. We try to pass along as much discount as we can to customers regardless, but even more so now to ensure they’re able to take advantage of the deadline if they’re able to.”

[RELATED: Broadcom Suspends VMware Sales One Week To Migrate SAP To Oracle]

Dell Technologies sent partners a memo warning VxRail with a perpetual license is only available until April 30, no exceptions.

“Orders placed post EOL Date and any order with more than a 3-year term for software and support will not be accepted. Ensure that orders are conforming and are placed with Dell prior to the April 30, 2024 deadline,” according to the memo, which was viewed by CRN.

In a statement to CRN, Dell Technologies said it had already alluded to the coming price increase – and others — in its most recent earnings call.

As you heard in Q4 earnings, we expect it to be an inflationary environment going forward, and we will price to the best of our ability in the market,” a Dell spokesperson said.

One Dell Platinum partner who is also VMware partner has experienced a rush of interest with customers hoping to keep their pricing low. He said there is no sugar-coating what happens to customers who need this technology come May.

“It’s created a demand spike for the product,” he told CRN. “Customers on VMware environments mostly prefer to lock in their perpetual licensing for three more years before any price increases kick in.”

In 2023, Dell dominated the hyperconverged worldwide revenue hardware market. The Round Rock, Texas company boasts a market share of 34.7 percent ($3.55 billion) compared with Nutanix’s 14.9 percent ($1.52 billion) and HPE’s 9.5 percent ($967.33 million), according to market researcher IDG.

Dell Technologies has generated at least $17.3 billion in revenue for VMware since 2021, and it annually provided nearly 40 percent of the virtualization giant’s sales through an ongoing partnership that was meant to last until 2026, according to regulatory filings.

Dell Technologies killed that deal at the end of January, a move that came two years before it was due to expire. Dell cited a clause that allowed it to exit the agreement within 60 days of a change of ownership.

CRN asked Dell Technologies if it expected to continue to support VMware’s revenue at that same level in the absence of those previous OEM agreements.

“Broadcom and VMware solutions currently remain a part of Dell’s portfolio of products, including embedded solutions such as VxRail. Your question about Broadcom’s business make-up is best directed to Broadcom,” a Dell spokesperson replied.

Broadcom declined to comment on the topic.

From his earliest remarks on the deal in May 2022, 18 months before it closed, Broadcom CEO Hock Tan said VMware’s perpetual licenses sales would end and all licenses would be subscription-based. VMware was purchased by Broadcom on Nov. 22. Broadcom announced the end of perpetual licensing Dec. 11. Dell, however, was still allowed to sell the VMware perpetual licensing on VxRail under until April 30.

“As a result of (Broadcom’s) announcement and other recent developments, we are announcing changes in our VxRail and VCF on VxRail product licensing structure,” Dell Technologies told partners in an email.

In addition to locking in perpetual licenses for VxRail by April 30, Dell Technologies said VxRail support renewals with perpetual VMware licenses are no longer available to purchase, and VxRail VMware hardware support renewals with vSAN embedded software “cannot be accepted and need to be requoted with hardware only ,” Dell wrote.

Dell Technologies said customers with existing VxRail systems with VMware licenses would be unaffected. Those customers will have ongoing “ProSupport / ProSupport+ until their respective software support contracts expire,” according to Dell’s memo.

The changes also do not affect Dell’s single-vendor first call support and deployment experience, including ProSupport and ProDeploy service, Dell stated in the email.



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“It’s created a demand spike for the product. Customers on VMware environments mostly prefer to lock in their perpetual licensing for three more years before any price increases kick in,” one VxRail seller tells CRN. The death of VMware’s perpetual licenses has come calling for Dell Technologies’ VxRail, with customers racing to lock in prices…

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